Use contribution after variable cost. The discounted price must still exceed variable cost.
Try this with your own numbersFormula and worked example
Required sales = ceiling(original contribution / discounted unit contribution)
| Input | Example |
|---|---|
| Original selling price | 100 |
| Variable cost per sale | 60 |
| Price discount | 10 % |
| Original sales volume | 100 |
| Calculated result | 134 sales |
Choose reliable inputs
Plan materials, travel and crew time before committing to a price. For this commercial janitorial calculation, use a completed job sheet, supplier quotes and a crew schedule and a consistent definition of one contract visit.
- Shift staffing: include the portion belonging to this contract visit or reporting period, and record where the value came from.
- Supplies: include the portion belonging to this contract visit or reporting period, and record where the value came from.
- Supervision: include the portion belonging to this contract visit or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Will a 10% discount need only 10% more sales?
Use contribution after variable cost. The discounted price must still exceed variable cost.
What if this input changes?
If original selling price rises by 10%, this example changes by -5 sales. This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.